“Hello, I’m your chief executive. Thanks for calling me on my special access phone number.”

“ Wow is that really you?”` [spacer height=”20px”]“Certainly, don’t you recognise my voice?” [spacer height=”20px”]“ Not sure I’ve heard it enough to know. Still thanks for taking my call.” [spacer height=”20px”]“No problem. You sound, how can I say, a bit worried? What can I do for you? What would you like to talk about?” [spacer height=”20px”]“ You’re right, I am concerned. I’m not at all happy about what’s going on with emission testing for our cars.” [spacer height=”20px”]“You’re not happy?” [spacer height=”20px”]“No” [spacer height=”20px”]“Tell me more”[spacer height=”20px”] “Well if I do, how can I be sure you won’t fire me, or something like that”[spacer height=”20px”] “I really understand your concern and can I assure you this is a totally confidential line. You don’t even have to tell me your name.” [spacer height=”20px”]“Alright then.”

Artificial intelligence (AI) systems are penetrating many business functions, from offering accounting advice, to handling hotel bookings–IBM is testing a robot concierge in a Hilton hotel, to offering investment tips–RBS is replacing some investment staff with “robo advisers.”    Most of what’s currently available though, is hardly more sophisticated than an advanced speaking clock. [spacer height=”20px”]The ability to pick up on people’s emotions and respond appropriately and differently in varied situations and demonstrate empathy is still more science fiction than reality. But had an AI system with empathy been available at VW,  as imagined above, might this have helped save the company from its faked emissions venture?[spacer height=”20px”] Perhaps. It’s hardly a stretch to believe genuine AI, rather than simple-minded algorithms, will soon invade the domain of compliance and company whistle-blower lines. These are meant to encourage people to speak up about issues that might bring a company into disrepute.[spacer height=”20px”] Yet  so far these lines are seldom used and rarely throw up anything truly significant. In fact, leaders are often lulled into a false sense of security because their company has an ethical hotline, perhaps supplied by an outside organisation, promising anonymity.[spacer height=”20px”] They seldom feel the urge to look beyond these artificial constructs, to review what is actually happening. Only when a genuine crisis heightens does their interest become intense. Speaking up is one of the least understood and most difficult causes of employee engagement.[spacer height=”20px”] Encouraging a genuine speaking up culture demands a new mind-set, a paradigm shift. [1] Much as they would like to, employers cannot create or generate a readiness to speak up in a company. Instead, they can only create the conditions in which employees feel free to do that. [spacer height=”20px”]In the average UK company for example, only just over half employees (65%) feel it’s safe to speak up about concerns which could threaten a firm’s reputation. [spacer height=”20px”]This leaves over a third unwilling to do so. Less than half feel confident management will take action on problems identified by them–see below.

The ability to pick up on people’s emotions and respond appropriately and differently in varied situations and demonstrate empathy is still more science fiction than reality. But had an AI system with empathy been available at VW,  as imagined above, might this have helped save the company from its faked emissions venture? Perhaps.[spacer height=”20px”] It’s hardly a stretch to believe genuine AI, rather than simple-minded algorithms, will soon invade the domain of compliance and company whistle-blower lines. These are meant to encourage people to speak up about issues that might bring a company into disrepute. [spacer height=”20px”]Yet  so far these lines are seldom used and rarely throw up anything truly significant. In fact, leaders are often lulled into a false sense of security because their company has an ethical hotline, perhaps supplied by an outside organisation, promising anonymity. [spacer height=”20px”]They seldom feel the urge to look beyond these artificial constructs, to review what is actually happening. Only when a genuine crisis heightens does their interest become intense. Speaking up is one of the least understood and most difficult causes of employee engagement. [spacer height=”20px”]Encouraging a genuine speaking up culture demands a new mind-set, a paradigm shift. [1] [spacer height=”20px”]Much as they would like to, employers cannot create or generate a readiness to speak up in a company. Instead, they can only create the conditions in which employees feel free to do that. [spacer height=”20px”]In the average UK company for example, only just over half employees (65%) feel it’s safe to speak up about concerns which could threaten a firm’s reputation. This leaves over a third unwilling to do so. Less than half feel confident management will take action on problems identified by them–see below.

Fear

According to an analyst at Evercore ISI, the independent investment banking advisory firm, VW was an organisation “full of hubris…in such an environment people just don’t speak up.” No amount of AI would change that without a wider culture shift. So how can leaders and compliance staff encourage employees to come forward and be truly “ethically engaged”. Relying on anonymous feedback might seem one way to encourage speaking up. If no one knows who said what and when, then won’t people be more open about ethical concerns? In fact, an offer of anonymity, and even immunity from any consequences of speaking up, merely confirms there’s a risk of doing so:

“If it has to be anonymous then it’s probably not safe to speak up.”

When confronted with adverse criticism or negative feedback some managers respond by demanding: “Who said that?” Those willing to speak up may therefore be concerned they might be triggering a witch hunt, and go to considerable lengths to ensure they cannot be traced. [spacer height=”20px”]This can seriously dilute the scope and value of what they have to say. [spacer height=”20px”]Yet another apparent incentive for reducing fear and creating the appearance of a willingness to hear whistle-blowers and others with ethical concerns, is to claim: “My door is always open”. [spacer height=”20px”]It may be, yet the onus remains on the individual to walk through the door—often passing by watchful and possibly vengeful colleagues. When speaking up also involves talking about a project personally driven by the manager, there may also be a reasonable fear negative information will badly received. [spacer height=”20px”]Even how a manager sits when hearing negative feedback can make a real difference to whether they overcome fear in the first place. Body language and subtle power positions can all prove a deterrent. [spacer height=”20px”]Ethical issues in a company for not arrive neatly labelled. Often they come disguised as day-to-day issues which only with more consideration do they reveal a serious ethical dimension. [spacer height=”20px”] When a new CEO  took over at Ford in 2006 the company was on the brink of bankruptcy. It  had lost a quarter of its market share since 1990. The changes Alan Mullaly set in motion meant he needed all executives to be working openly as a team, and willing to speak up about problems. [spacer height=”20px”]Such was Ford’s environment the executives were afraid to speak about problems and were worried colleagues would pounce on  any sign of vulnerability. Mullaly set out to strongly and publicly praise those who did speak up. [spacer height=”20px”]Eventually they realised being honest allowed them to work together and fins solutions. [2]

Career limiting 

Sometimes, speaking up can be a career ending experience. The frequency of this happening, by “shooting the messenger” may also deter people from raising their heads above the parapet. [spacer height=”20px”]Paul Moore, former head of regulatory risk at HBOS for example, was sacked in 2004 for raising the alarm about the banks’ excessive risk taking. Having detailed to the board the weak risk controls and suggested a rethink on sales targets, the unthinkable happened: chief executive James Crosby sacked him. [spacer height=”20px”]Moore’s accusations that the board did not understand the risk it was running were vindicated in 2015 by regulators with an official report into the bank’s 2008 collapse. It revealed the devastating mistakes that led to its bailout.  Says Moore:

“I think most people knew I was right and had a lot of admiration for me but could not associate with me because of the risk to themselves. Now they see I spoke from conscience and competence, not hatred.” Paul Moore [3]

Most recently, Thomas Piquemal, the finance director of French energy giant EDF decided not to wait until he was pushed for his most unwelcome view of an impending decision.[spacer height=”20px”] In March 2016 he resigned over the plan to build two nuclear reactors in Hinckley Point. He felt that pushing ahead with the £18bn project would threaten the company’s financial situation. It remains to be seen whether Piquemal has trashed his career by speaking out.[spacer height=”20px”]  

Action, what action?

In VW the CEO at the time almost certainly knew about the fiddling of emissions data. In May 2014 he is reported as having received a memo about the irregularities. Yet it seems he did nothing about it. [4] The next year in July he attended a company meeting where where the issue was discussed. Again, nothing happened, until finally the scandal broke much later in September 2015. As one analyst claims:

“This is either gross incompetence or extreme arrogance.”

Whichever it was, is not yet determined but this particular CEO subsequently resigned. Nor was he alone. Leaked documents suggest the head of VW in the US was reportedly sent an email some 16 months before the emissions scandal broke. It alerted him to the risk the car maker faced. He too has resigned. For anyone with knowledge that something in their company is going wrong or in danger of doing so, a common concern will be: “

“Will anything actually happen as a result of putting myself on the line?”

Too often, having spoken truth to power nothing does happen. Except the person concerned is left frustrated about the lack of response.

 “…the biggest reason for withholding ideas and concerns wasn’t fear but rather the belief managers wouldn’t do anything about them anyway.” [5]

Since most leaders have an agenda which they’re keen to work on, speaking up about some non-related issue can also be a lost cause. Signs of listening may exist, yet with little interest or intention of acting act on the information. Worse, having heard something is amiss, no resources are then allocated to doing something about it. Again the message goes out: it’s not worth speaking up. Making sure people know what happened in response to their speaking up is an essential part of gaining trust to take such a risky step.  To avoid creating a feeling it’s all been a waste of time, the company must explain clearly what it intends to do next and then show that it did it.

Age blockages

One factor deterring young people from speaking up when they see something wrong is facing an overwhelming cohort of much older senior managers. The average age of directors who govern the UK’s biggest listed companies for example is 57, and one in six board seats is held by someone over 64.  [spacer height=”20px”]To young millenials this can appear a daunting obstacle to bring ethical issues into focus. To counter the danger of age structures silencing  young voices, some companies, like M&C Saatchi Group, and the Lida Group, have created mirror boards filled with millenials. [spacer height=”20px”]These help to amplify young employees’ voices to those at the top. For example at Lida the mirror board meets the regular board once a month.

Gaining ethical commitment

Ethical commitment arises when employees  become so engaged with a company and its purpose they feel personally protective of its reputation. But how exactly do you bring about such an ideal culture, in which doing the right thing is everyone’s concern? [spacer height=”20px”]It starts with an environment in which exchanges of difficult or confronting information occur regularly. When it’s entirely normal for people to talk about and question proposed decisions, for example, the chances that people will be willing to speak up will be high and a natural part of the process.[spacer height=”20px”]Making sure the organisation regularly talks about issues such as values, decision making and ethics helps oil the wheels and encourages a culture of speaking up. [spacer height=”20px”]Transparency about the feedback process can also reduce fear and increase participation. When people know and understand how their contributions will be received it builds trust that it is worth speaking up.[spacer height=”20px”]So too can deliberately reaching out to ask people what are their current concerns, and how these relate to pursuing the values and ethics of the company.

Walk the Talk

It’s hard to exaggerate the importance of leaders setting an example, showing by their own behaviour what really matters. [spacer height=”20px”]When people see the leader doing what they’re advocating it can be a source of great encouragement. For example, a leader who keeps a well-thumbed copy of the code of conduct on their desk and is seen using it, sends a subtle message about the importance of doing what’s right. [spacer height=”20px”]When leaders openly talk about ethics and values and are clearly committed to pursuing these, this again inspires confidence to speak up. [spacer height=”20px”]An ability to inspire people to speak freely is important way. Leaders must learn how to engage people with the need to take ethics and compliance seriously. In aiming for this, leaders can usefully consider these seven key questions about voice [6][spacer height=”20px”] Another leadership action to win ethical engagement is to make sure conversations about ethical and compliance issues occur regularly and systematically throughout the company. Asking for this to happen is not enough. It may mean dismantling age old blockages to speaking up, and installing adequate monitoring to ensure such talk actually occurs. [7] Sources: [symple_toggle title=”Sources” state=”closed”]

1. Releasing Voice for sustainable business success, Tomorrows’ company, 2009
2. J.Lorsch and E. Mctague, Culture is not the culprit, HBR, April 2016
3. Whistleblowing almost killed me, FT July 6^th 201
4. VW management back in scandal spotlight FT 4^th March 2016
5. Hawkes, HBoS whistle-blower: I wouldn’t do it again, This is Money, 21 November 2015
6. Detert and E. R. Burris, Can Your employees really speak freely? Jan-Feb Harvard Business Review 2016
7.  H.Davis, Dismantling age-old blockages at the top, FT 17th March 2016

[/symple_toggle] main robot image: Shutterstock`

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